Under the Conservatism Principle,liabilities and Expenses Would Be Overstated,rather Than

question 147

True/False

Under the conservatism principle,liabilities and expenses would be overstated,rather than understated.

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Definitions:

Closing Entry

A journal entry made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, essentially resetting the temporary accounts for the new period.

Post-Closing

The final phase in the accounting cycle where accounts are prepared for the start of the next period, following the closing entries are made to reset temporary accounts.

Adjusted Trial Balance

A statement listing all accounts and their balances after adjustments, used to verify the equality of debits and credits before preparing financial statements.

Unadjusted Trial Balance

A preliminary list of all accounts and their balances used in accounting, before any adjustments are made for the closing entries.